Nepal’s apex private sector body on Tuesday requested the visiting board officials of the China-backed Asian Infrastructure Investment Bank (AIIB) to invest in Nepal.

According to the statement issued by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Tuesday’s meeting specifically dealt with exploring potential investment opportunities in Nepal across various sectors.

Talks were also held on how AIIB could contribute the most in sectors like transportation, energy and urban development, among others. Discussions were held on how the private sector could contribute to the sustainable development of Nepal, the statement said.

Presenting his views, FNCCI President Chandra Dhakal said that Nepal is a country with immense potential for growth and development. He informed the AIIB board officials that the private sector is eager to leverage this potential through strategic partnerships with organisations like AIIB.

Dhakal also said that Nepal is strategically located between two economic giants, India and China, which means Nepal can provide easy market access to goods produced in Nepal to two of the world's biggest markets.

Dhakal highlighted that there are investment opportunities in infrastructure, energy, tourism and agriculture in Nepal. He also informed the officials about the external sector stability that Nepal has achieved. Nepal’s foreign exchange reserves have reached record highs in recent months.

Dhakal mentioned that the country is now focused on improving domestic consumption.

“As AIIB has already been a key partner in several important projects in Nepal, we are eager to explore new avenues for collaboration.”

Dhakal also informed the board officials of AIIB that the Nepali government is in the process of amending different laws to improve the investment climate of the country. He stated the government is serious about streamlining processes and regulations to create a better 'doing business' climate.

Dhakal said the framework for bilateral investment agreement is expected to be finalised soon.

Further talking about investments, Dhakal informed AIIB officials about the Nepal Investment Summit scheduled for April 28-29. The ‘good aspect’ of the Investment Summit this time is that the private sector too has been included as co-organisers, he stated.

Dhakal also mentioned that the private sector of Nepal has been leading the country's economic development and will continue doing so in the future. “As president of the FNCCI, I can assure you that we will leave no stone unturned for the socio-economic development of Nepal,” he said.

Nepal Electricity Authority, the country’s energy utility, also urged the AIIB to increase investment in Nepal’s energy sector.

The authority urged the delegation to provide loans at cheaper interest rates for the improvement of energy infrastructure.

The delegation also met Nepal Rastra Bank Governor Maha Prasad Adhikari.

During the meeting, Adhikari informed the visiting delegation about the shortfall in domestic resources to finance critical infrastructure projects.

Meanwhile, Prime Minister Pushpa Kamal Dahal on Monday urged the visiting AIIB delegation for a policy to provide concessional loans to Nepal.

During a courtesy meeting with a delegation led by RMP Rathnayake, an AIIB board member, Dahal said that since AIIB has no provision for concessional loans, it will be difficult for a country like Nepal to borrow.

“Nepal still needs concessional loans. I urge you all to consider this."

The prime minister said that currently there are a few projects under AIIB investment in Nepal in the energy sector and there are ample possibilities for investment in hydropower, tourism, information technology and other infrastructure projects.

"Nepal has reached an agreement to export 10,000 megawatts of electricity to India and Bangladesh as well. This has opened the investment door in Nepal's energy trade," he said.

In 2019, the AIIB approved a loan of up to $90 million for the 216-megawatt Upper Trishuli-1 Hydropower Project, AIIB’s first project in Nepal. In the same year, the AIIB also approved a $112.3 million loan to Nepal to increase access and improve the quality and efficiency of electricity supply across the country’s western regions.

The Distribution System Upgrade and Expansion Project is AIIB’s first sovereign-backed financing project in Nepal. This is not only the first project to receive approval but also received AIIB’s technical assistance under the Special Fund, enabling comprehensive project preparation from the very early stage.

In 2018, Nepal received a $1 million grant under AIIB’s Special Fund to assist the government in preparing the electrification programme in western Nepal, in terms of the feasibility study, technical design, and environmental and social management.

Headquartered in Beijing, the AIIB began operations in January 2016 and has now grown to 100 approved members worldwide.